Radio Address to the Nation on the Program for Economic Recovery

May 1, 1982
My fellow Americans:

This broadcast today is coming from the American Pavilion, the World's Fair that opens in
Knoxville, Tennessee, today.

Two nights ago I went on national television asking you to help us get a bipartisan budget passed
in this Congress -- not just any budget, but a budget that will hold down your taxes and get
spending under control so we can reduce deficits, interest rates, and put unemployed Americans
back to work. Let me just say, your calls and telegrams really warmed my heart. You came
through with the greatest outpouring of support our administration has ever received, and you let
us know that while our program did not in its first 30 weeks solve all the problems that have piled
up for more than 30 years, it is beginning to work.

Ernest Key wired us from Georgia: ``Gas in Atlanta is 20 cents per gallon cheaper than this time
last year. Inflation is almost cut in half. All of this began after October 1st,'' he wrote. Well,
October 1st was the start of our program.

Hazel Quinn from Texas said, ``As a senior citizen living on social security, your program is
working to our benefit. Groceries have remained stable.''

John McMullen from Michigan told us that, ``The other philosophy of tax and spend has a record
of failure. Fight on,'' he said. Well, we will.

We're seeing signs that the economy is ready to turn up. The record high interest rates we
inherited nearly wrecked the housing industry, but as we've begun to bring those rates down,
housing starts have increased steadily over the last 5 months. Airline travel, an indicator of future
business activity, is up. There'll be an increase in automobile production in the second quarter of
1982.

Another very important sign -- Americans are starting to save again. In the 6 months since that
first 5-percent phase of our tax cut took effect, the rate of personal savings has risen to 5.7
percent from 5.1 percent for the year before. This means billions more in the capital pool to
finance new investments, jobs, and economic growth. It also indicates lower interest rates
ahead.

We can do even better if you help us protect the first decent tax incentives for your families -- the
10 percent cut in July and the one in 1983 -- the first since John F. Kennedy's tax cut nearly 20
years ago. Yes, our tax cut is big, and yet it barely offsets the enormous increase in taxes built
into the system in 1977. That was the biggest single tax increase in our history, and there are more
installments of that yet to come in the next couple of years.

We must be fair to all our people. We're devoting one of the largest shares in the history of the
Federal budget to assisting low-income Americans. But let's ask ourselves, where was the fairness
in those bankrupt spending policies that gave us double-digit inflation, record interest rates, and a
trillion-dollar debt? Where is the fairness now if we make even more painful the highest peacetime
tax burden we've ever known? We're not going to do that. With your support, with responsible
Republicans and Democrats working together, we can pass a good budget that will help taxpayers
more than it hurts them.

Last year with your help we passed a budget bill that lowered the spending increase by more than
$30 billion. How big would the projected deficits be if that hadn't been done? Those who fought
and voted against those savings are fighting against the additional savings that we've proposed for
1983.

It's extremely difficult for the Congress to withstand the pressures for more spending. That's why
I asked Congress to pass, as soon as possible, a constitutional amendment to require balanced
Federal budgets, and that's why I'm appealing to all of you at the grassroots. Start putting
pressure on the Congress now. Let's find out who's hiding behind the rhetoric of balanced budgets
but is unwilling to make the cuts in spending needed to bring them about.

There are now two resolutions pending, one in the House and one in the Senate, that enjoy strong
support and that would lead to such a constitutional amendment. They would require the
Congress to adopt a balanced statement of taxes and spending each year. But the growth in
revenues could not exceed the prior year's growth in national income. In other words, it would
contain a limitation so that you couldn't just have a balanced budget by always sending the bill to
the taxpayers for whatever the deficit might be. A balanced budget amendment would have to be
ratified by three-fourths of the States. The Congress could approve a deficit, but only by a
60-percent vote of the full membership of both the House and Senate.

I'm convinced that most of you do support the need for a constitutional amendment. After my
speech night before last, the public response was more than 7 to 1 in favor of the idea.

Government must stay within the limit of its revenues. This is not a political issue between parties.
It's an issue simply of sense versus nonsense, of endless red ink versus lasting recovery. With your
voices and your support good sense will prevail.

Thank you, and God bless you.

Note: The President spoke at 12:05 p.m. from the U.S. Pavilion at the Knoxville International
Energy Exposition (World's Fair) in Knoxville, Tenn.